Unit 4: Developing Consumer Skills

Federal Trade Commission (FTC)

alerts consumers about fraud and unfair business practices

Step two of the PACED decision model

alternatives- list alternatives that are being considered

Breach

an act of breaking the terms set out in a contract

Cellphone contracts are generally (blank) contracts.

standard

3 Steps to Making a Contract

1.) A customer makes and offer. 2.) A seller accepts the offer. 3.) The buyer and seller exchange something of value (consideration)

Consumer Remedies Steps

1.) return to the place of purchase- be polite but firm 2.) contact the business 3.) get help from a government or private consumer protection agency 4.) take a legal action, if necessary

A three-day cooling off period applies to which of the following? A.) Items purchased from temporary business locations, such as mall kiosks B.) All of these C.) Sales hosted in locations such as a hotel, restaurant, or convention center D.) Home-sale parties E.) Purchases made from a door-to-door salesman

B.) All of these

A product's packaging is part of which of the 4 P's of marketing? A.) Preferences B.) Product C.) Place D.) Promotion E.) Price

B.) Product

Potential costs of going paperless include which of the following? A.) Missing payments B.) Delay in monitoring accounts C.) All of these D.) Remembering passwords E.) Limited access to older statements

C.) All of these

Which of the following is an example of conspicuous consumption? A.) Expensive jewelry B.) Rolls Royce automobiles C.) All of these D.) Silver spoons E.) Rolex watches

C.) All of these

A PACED decision-making grid used to decide where to go to college might include which of the following alternatives? A.) Job placement success B.) Forgone earnings C.) The local community college D.) Distance from home E.) Rate of return on investment

C.) The local community college

Which of the following is a consumer right? A.) All of these B.) To safeguard against fraud C.) To be informed D.) To maintain vigilance E.) To pay low prices

C.) To be informed

Determining whether each criterion is favorable or unfavorable is done during the [1] phase of the PACED decision-making process. A.) alternative B.) decision C.) evaluation

C.) evaluation

A consumer should continue to comparison shop as long as the marginal benefit from the additional time spent is A.) greater than zero B.) greater than the price of the product C.) greater than the marginal cost D.) less than the price of the product

C.) greater than the marginal cost

Which of the following government agencies provides consumer information about goods and services? A.) CPSC B.) CFPB C.) FTC D.) All of these E.) FDA

D.) All of these

Which of the following should be covered in a roommate agreement? A.) how living space will be shared B.) who pays for what and when C.) rules regarding pets, smoking, drinking, and guests D.) All of these E.) who takes care of chores

D.) All of these

Which of the following is a step to take to avoid credit card fraud? A.) Notify the card issuer immediately if you lose your card. B.) Sign your card as soon as you receive it. C.) Store your card in a secure place. D.) Be sure to secure your receipt after you buy something on credit. E.) All of these

E.) All of these

Advertising is never meant to inform consumers. True or False

False

Any item you must pay for with a credit card is conspicuous consumption. True or False

False

Consumer protection laws make it easy to recover from identity theft. True or False

False

Determining the procedures used to make a decision is the first step in the PACED decision-making model. True or False

False

A buyer's remorse law gives consumers the right to return goods for any reason or no reason during a given number of days after purchase. True or False

True

A well-planned filing system makes it easy to shred documents you no longer need. True or False

True

Food is a commonly recalled product. True or False

True

Magazines like Consumer Reports and Money provide consumers with useful information on a variety of products and services. True or False

True

Sales incentives include rebates, loyalty programs, promotional items, and bonus products. True or False

True

The state law that addresses tenant-landlord issues is the Virginia Residential Landlord and Tenant Act (VRLTA). True or False

True

You will need access to important documents when you file your taxes, or apply for a loan, credit card, job, or apartment lease. True or False

True

Sales Incentives

are enticements to get customers to purchase products or services. They include rebates, loyalty programs, promotional items, or bonus products.

Financial Institutions

banks, credit unions, savings and loans

A (blank) buys and sells assets for someone else.

broker

Brokers

buy and sell your investments for you, using their financial knowledge of the market

Comparison shopping does NOT involve considerations of

celebrity endorsements

Dollar Costs

comparison shopping required calculating the total dollar cost of alternative products or services. The total cost includes all payments, taxes, and other fees required for the purchase.

Buying goods and services not for their intrinsic value but for the purpose of impressing others is called

conspicuous consumption

Cause Marketing

cooperation between a for-profit business and a non-profit organization to promote social and charitable causes

Skimming

criminals use a special device that records credit or depit card information

Step three of the PACED decision model

criteria- establish the different criteria that you will use to make the decision

Step five of the PACED decision model

decide- make the decision based on the evaluation of the criteria

Step four of the PACED decision model

evaluate- evaluate each alternative considered according to the criteria established

Phishing

fraudulent emails purported to be from banks, companies, or government agencies solicit personal information

Hacking

hackers are dishonest people with computed skills who use software to break into email or online accounts to obtain person information

Breaking into email or online accounts to obtain personal information is called

hacking

Null and Void

having no legal force

Product Guarantees

include promises to give the customer their money back, and free product repair or replacement. The value of a product guarantee depends on its cost compared to its benefits.

Inbound Marketing

information the consumer is seeking from the business

"Oaty cereal helps you lower your cholesterol" is an example of (blank) advertising.

informative

Investor Services

involves

Identity theft

is the acquisition of someone's private identifying information by fraud

Marginal Benefit (MB)

is the additional benefit of an additional unit. As you continue to do or buy something, the marginal benefit of continuing decreases. You get less additional satisfaction as you consume more and more units of a good. That is, the first units are better than the last.

Marginal Cost (MC)

is the additional cost of an additional unit. As you continue to do or buy something, the marginal cost of continuing increases. You give up more as you consume more units of a good. That is, the first units cost less that the last (think opportunity cost).

Household Inventorty

list of valuable property

Conspicuous Consumption

making purchases with the intent of impressing others- when people prefer a good because it is more expensive

Point-of-Purchase (POP) Marketing

marketing that happens where products and consumers are located, for example product displays an on-product coupons

Better Business Bureau (BBB)

mission is to be the leader in advancing marketplace trust

Step one of the PACED decision model

problem- determine the problem to be solved by the decision

Consumer Product Safety Commission (CPSC)

provides information on product safety

Food and Drug Administration (FDA)

provides information on the safety and effectiveness of food and drug products

Earned Media/Public Relations

publicity not from advertising, like newspaper articles

Investment Firms

publish newsletters grading different stocks, bonds, and funds

The first step in the four-step process to address consumer complaints is to

return to the place of purchase

Direct Selling

sales people build face-to-face relationships with customers

A sum of money kept by the landlord during the term of a lease is called a

security deposit

Opportunity Costs

the value of what is given up when purchasing alternative goods and services must be considered when comparison shopping. For example, the service required to maintain one seller's product may require a trip to another city each year while another seller's product can be maintained nearby.

Sublet

transferring a lease to another tenant

Co-branding and Affinity Marketing

two brands join together to promote a single product or service

Force Majeure

unforeseeable circumstances that prevent someone from fulfilling a contract

Outbound Marketing

what the businesses send to you as a marketing tool for their products and services

Assignment

when one party to an existing contract hands off the contract's obligations and benefits to another party

Financial Advisors

who provide financial services/ guidance to clients